MONEY MASTER

The world’s debt surged by over $12 trillion in the first three quarters of 2024, reaching a record $323 trillion , according to a report by the Institute of International Finance (IIF) . The rise reflects increased borrowing fueled by falling borrowing costs and renewed investor risk appetite . Key Insights Debt Drivers and Projections Sovereign debt is expected to grow by one-third by 2028 , reaching nearly $130 trillion , driven by large government budget deficits. Emerging markets debt is nearing $105 trillion , or 245% of GDP , signaling elevated repayment risks. Debt-to-GDP Trends Global debt-to-GDP ratio stands at 326% , down from its pandemic peak but still historically high. Developed markets face the fastest rising debt service costs , exacerbating fiscal pressures. Environmental Costs Meeting global emission reduction targets could add an extra $38 trillion to global debt by 2028. Risks and Challenges Mini Boom-Bust Cycles : Rising trade tensions and supply-chain disr...

Hong Kong has eased its mortgage rules, allowing homebuyers to pay a lower down payment in a bid to address the city’s ongoing property market slump. The loan-to-value (LTV) ratio for all residential properties has been set at 70% , reducing the required down payment for homes valued above HK$35 million . Previously, these homes had an LTV ratio of 60%. Additionally, the LTV ratio for company-held properties has also been raised to 70% from 60%. These changes took effect immediately, with the Hong Kong Monetary Authority (HKMA) stating there is room for adjustments due to the softening property market in recent months. Furthermore, Hong Kong’s New Capital Investment Entrant Scheme has been expanded to allow investment in homes valued at HK$50 million or more, with a cap of HK$10 million on the amount counted towards total capital investment. Following the announcement, the Hang Seng Property Index rose as much as 3.9% , outperforming the main Hang Seng Index . However, the prop...

Hong Kong banks borrowed HK$4.79 billion ($617 million) from the Hong Kong Monetary Authority (HKMA) via the discount window on Monday, marking the highest short-term borrowing since December 2019. The increase in liquidity demand reflects rising borrowing costs and tighter Hong Kong dollar liquidity. This surge in borrowing comes as the one-month Hong Kong Interbank Offered Rates (Hibor) climbed to its highest level in two months, fueled by demand for local assets amid a rally in Chinese stocks . Other contributing factors include soaring equity settlement demand , increasing margin financing activities, and ongoing silver bond subscriptions . Ken Cheung, chief Asia FX strategist at Mizuho Bank , noted that the increased usage of the discount window mirrors tighter liquidity conditions and rising demand for Hong Kong dollar assets. The Hong Kong dollar has remained relatively stable, trading just below 7.77 per dollar , within its pegged range of 7.75 to 7.85 against the US dol...

Despite the Federal Reserve's half-percentage-point interest rate cut last week, public sentiment about the economy remains uncertain. While lower rates have begun making credit cheaper for households and businesses—leading to reductions in mortgage rates and corporate bond yields —the impact has yet to be fully felt by consumers. The Fed's recent move marks the first in a series of expected rate cuts, aimed at easing credit conditions and potentially improving the financial outlook for Americans. However, it is unclear how quickly this will influence voters' perceptions ahead of the November 5 US presidential election . Inflation has dropped sharply, with the consumer price index (CPI) falling from over 9% in mid-2022 to 2.6% in August 2024. Yet, Americans like Julie Miller from Nevada, one of the battleground states, still face economic pressures. While Miller's daughter struggles to buy a home due to high prices, rising costs at places like Taco Bell have forc...